Electronic bills of exchange for international trade
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We launched a decentralized application (#dApp) that makes possible to create and to transfer electronic bills of exchange on the Ethereum #blockchain: https://cryptonomica.net/bills-of-exchange/ Electronic bills of exchange can be created as smart contracts implementing all the requirements of an "instrument" as defined in Geneva Convention or of an "order in writing" as defined in U.K. Bills of Exchange Act 1882 or of a "draft" as defined in U.S. Uniform Commercial Code.
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Electronic bills of exchange for international trade
- 1. Blockchain based electronic bills of exchange in international trade Developed by Cryptonomica cryptonomica.net/bills-of-exchange
- 2. 'Bananas buyer' company has funds in Bank and want to buy bananas from 'Bananas Seller' company. 'Bananas Seller' can get bananas at good price from 'Bananas Producer' company, but they both has no bank accounts. 'Tractor seller' would like to sell tractors to 'Bananas Producer', but the letter has no acces to bank. 'Banana producer' would like to pay local people, but in this country the local currency is not valued. These people would like to buy from online stores, and they would sell to them if they could pay. Bananas Buyer BANK Tractor Seller unbanked country Bananas Seller offshore island Bananas Producer Local people Online store
- 3. The Buyer and Seller have agreed that a letter of credit (L/C) will be used. The Bank issues L/C as defined in "The Uniform Customs and Practice for Documentary Credits", International Chamber of Commerce Publication No. 600 (UCP 600) But takes Buyer's money as a collateral. Bananas Buyer BANK Bananas Seller offshore island The letter confirming the Bank's obligation to accept bills of exchange (“drafts”) drawn by the Seller upon presentation of documents confirming the shipment (one of the forms of L/C as defined in UCP 600) UCP 600 Letter of Credit (L/C)
- 4. The Seller draws on the Bank a bunch of electronic bills of exhange on blockchain. Say 10M bills $1 each. BANK Bill of Exchange Bill of Exchange To: 'The Bank' At sight pay in New York to the bearer $1 Signed: 'Seller', 2020.1.23, London Bananas Seller offshore island
- 5. 'Bananas Seller' ships goods to 'Bananas Buyer', then presents to the Bank documents confirming the shipment of goods and bills of exchange drawn on the Bank Bananas Buyer BANK Bill of Exchange Bananas Seller offshore islandBill of ExchangeBill of Exchange
- 6. The Seller draws on the Bank a bunch of electronic bills of exhange. Say 10M bills $1 each. BANK Bill of Exchange Bill of Exchange To: 'The Bank' At sight pay in New York to the bearer $1 Signed: 'Seller', 2020.1.23, London Accepted: 'The Bank', 2020.1.29, London Bananas Seller offshore island
- 7. 'Bananas Seller' pays wih the electronic bills of exchange to 'Bananas Producer' Bananas Buyer BANK Tractor Seller unbanked country Bananas Seller offshore island Bananas Producer Local people Bill of Exchange
- 8. Blockchain based $1 electronic bill of exchange accepted by a bank is actually the same as $1 on an accont in this bank. Even better, as you can send it to any person, regardless of whether it has an account with this bank, just like you would be able to send a paper bill of exchange by post. BANK Bananas Producer Bill of Exchange Tractor Seller Bill of Exchange Bill of Exchange Well, this country is not more unbanked... On line store Bill of Exchange